Lxb Retail Properties Share Discussion Threads

[loglorry1] 06/10/2016 19:57

@ss in an ISA there really isn't much difference which way you take it.

[simonsaid1] 06/10/2016 14:29

Thanks chaps!

@loglorry, the offset is the same either way isn't it - I receive 18p a share, share price drops by same amount. No dividend tax as I'm in an ISA, so I guess I'll just leave it as 'default'!

[tiltonboy] 06/10/2016 13:47

ss1,

The redemption of the B shares is a corporate event, so you wouldn't have to pay any charges.

[loglorry1] 06/10/2016 12:37

@simon the main difference is tax treatment. Option 2 attracts capital gains tax Option 1 income/dividend tax.

Depending on your tax situation one may be preferable over the other. Normally folk go for the capital gain to offset the capital loss as the share price drops by the distribution.

Log

[simonsaid1] 06/10/2016 12:27

BestInvest offering B shares:

Option 1: Income Option - for every share held holders will receive a cash dividend of GBP0.18 per share (DEFAULT OPTION).

Option 2: Capital Option – for every share held holders will receive 1 B share; each B share will then be redeemed at the rate of GBP0.18 per share.

Is there any particular reason to go for B shares when they're instantly redeemed for the same value as the dividend? Presumably I'd then have to pay commission for the redemption...?!

[simonsaid1] 29/9/2016 14:45

Tiltonboy, I bought based on a tip from Simon Thompson some months ago (a little while before the 38p distribution prior to this one) that I apparently misunderstood. It's only a small stake I'm playing with (as a learning exercise, I find I learn faster when there's real money on the line, albeit not a vast amount), so reinvesting my returns each time may be disadvantageous due to commission (BestInvest, £7.50/trade).

It's probably not worth it for 18p a share. So I suppose I just hope that the final amount returned by the time it's fully liquidated will exceed what I spent on the shares. Thank you for your patience and explanation.

[badtime] 29/9/2016 14:39

Personally 10p above current share price within the next 12 months would be more than an adequate return Imho

[tiltonboy] 29/9/2016 14:38

ss1,

Thanks for clarification. I suppose what I should have asked was given the company was in wind-up mode, what prompted you to buy them. As flyfisher so eloquently wrote, the issue with wind-up's is that you have to have sufficient confidence in the assets, and their carrying values to make an informed decision.

portside1,

I think you will find that the share price will drop very much in line with the 18p payout. Anything much less a fall than that will see an avalanche of sells.

[shaker44] 29/9/2016 14:36

Thanks.iweb tell me their cut off is 17/10

[portside1] 29/9/2016 14:27

the directors will make sure they make money

[portside1] 29/9/2016 14:27

read the chairmans statement and then look at directors buys , I do not think the share price will fall more than 7p on the 22nd . my view that is why I have added another 10.000 today will add another 25.000 before 21st

[shaker44] 29/9/2016 14:23

How do you get to that
??

[portside1] 29/9/2016 14:23

ex div 5.30pm on the 21st oct after that date if you buy you do not get the 18p div

[portside1] 29/9/2016 14:01

above 68p after the 18p

[shaker44] 29/9/2016 13:50

I was trying to work out whether to add ahead of the 18p again but not easy to see how much will be distributed eventually?

[portside1] 29/9/2016 13:39

just added another 10.000

[simonsaid1] 29/9/2016 13:15

Tiltonboy I am invested in LXB but only a very small amount - I just meant I have little basis for assessing whether it's worth continuing to buy more LXB, simply because I don't have a vast amount of knowledge and rely on forums and columns etc. I'm still learning, so I have many little 'experimental' small holdings in smallcap companies.

Flyfisher, thank you, that is extremely helpful. So this means future distributions will eventually exceed the share price? So, this present distribution neutralises, but in time they will build?

Forgive my ignorance, we all have to start somewhere.

[flyfisher] 29/9/2016 13:06

simonsaid, I have studied several winding up situations over recent years, bgbl, pur, eret, wind, cdi, jil, len, nri come to mind. Generally they trade at a discount to nav or sum of the parts and the main holders see a liquidation as a way to realise fair value.

Much can be learned from a study of any of the above, in the case of cdi one will find overvalued assets in the books and an overpaid manager who has looked after debt holders to the expense of equity holders.
With NRI you will find sound management with prudent valuations leading to a rising nav as it follows the process to ultimate liquidation.
ERET, was recently a good market when it announced a sale of assets at a healthy premium.
JIL , conversely, when it announced book writedowns.

May I suggest you look back over the years at a couple of them as a means of understanding the catalyst for price improvement or destruction.

With regards to LXB, which used to trade at a small discount to nav, but now trades at a premium. The market is clearly anticipating asset sales at a sufficient premium that will cover operating expenses and provide holders with a premium to current s/p.
Time will tell if that is correct.

No position held in LXB.

[tiltonboy] 29/9/2016 12:51

ss1,

Are you invested in LXB?

On the basis of your last comment - "Thanks chaps. I have little basis to make that decision, so will do some research." I assume that you are not.

[simonsaid1] 29/9/2016 10:43

Thanks chaps. I have little basis to make that decision, so will do some research.

[badtime] 29/9/2016 10:33

So SS1 ...I guess post return of cash you might want to use those proceeds to buy more

[tiltonboy] 28/9/2016 16:30

ss1,

The company is winding up, so you know you are getting your money back. The question is, will they return more cash than the share price?

If you think it will, then you need to work out your potential returns, by hazarding a guess what they are worth.

[simonsaid1] 28/9/2016 16:26

Thanks Eeza, this is what I thought. I recently had a different stock tender and it was obviously lucrative as I was paid above the current stock price for my shares. Cash return seems to make sense for a long-term holding in a profitable company, where you can expect the shares to rise over time after each distribution, and continue to pay out, but with a company in liquidation mode I'm not clear on any particular benefit for us. Happy to be proven wrong. Earlier in this thread many people told me I was wrong but didn't really explain it other than to say 'you get back more than you put in', but as far as I can tell that's only in the same sense as you would with regular stock price appreciation.

[eeza] 28/9/2016 16:11

It is neutral because it is a Cash Return, in effect (although stated to be a dividend).
Tenders at NAV are far preferable because then you get a bit of the 'jam' as the liquidation progresses.
What I don't like about cash return method is, the 'jam' is always left in the pot, you're only given your own money back.
Buying after the CR will give a lot more leverage on the 'jam' that is still left, and which should have been distributed to the current holders.

[badtime] 28/9/2016 15:40

Tilts is the expert he'll let u know